Brussels conditionally approves the purchase of 41% of ITA Airways by Lufth

Brussels conditionally approves the purchase of 41% of ITA Airways by Lufthansa

05-07-24

The European Commission has given the green light to Lufthansa's purchase of 41% of ITA Airways, albeit with certain conditions. The approval is subject to the divestiture of several short-haul routes between Italy and Central Europe and long-haul routes with connections to the United States and Canada.

Lufthansa and the Italian Ministry of Economy and Finance must allow one or two airlines to offer direct routes between Rome, Milan and certain Central European airports for a minimum period. In addition, they must ensure that competing airlines have access to ITA Airways' domestic network to offer connections with stopovers.

As for long-haul routes, the resulting company must sign agreements with other companies to improve its competitiveness by increasing the frequency of non-stop flights and improving connections with stopovers.

At Milan Linate airport, Lufthansa and the Italian Ministry of Economy will transfer takeoff and landing slots to other airlines for short-haul routes. This will enable the winning airlines to establish a sustainable base at Milan Linate and offer their own connections between Italy and Central Europe.

Lufthansa and the Italian Ministry of Economy will only be able to proceed with the operation once the Commission approves the measures implemented on the routes and at Milan Linate. An independent trustee will oversee the implementation of these commitments under the direction of the Commission.

Last year, Lufthansa agreed to acquire 41% of ITA Airways, born out of the liquidation of Alitalia, through a capital increase valued at €325 million. Following the closing, Lufthansa will take over the operational management of ITA Airways, integrating it as the Lufthansa Group's fifth airline.

European Commission Vice President Margrethe Vestager stressed the importance of preserving competition in the sector, preventing passengers from paying more or receiving lower quality services.

The European Commission concluded that, under these conditions, the transaction does not raise competition concerns. The investigation considered concerns about the reduction of competition on key routes and the possible strengthening of ITA Airways' dominant position at Milan Linate.

Brussels has taken this decision following a thorough investigation and consultations with other market operators, partners, competing airlines, airports and passenger associations. The final decision is conditional upon full compliance with the commitments set out to maintain a competitive and fair market.

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